Call this EAP (Earnings after Payments)To dig a little deeper, I'll also subtract the cash I tied up ($150K is about $30K + any rehab or closing costs at time of purchase) and apply a "cost of cash" (what is my opportunity cost of that investment in a fairly safe instrument), along with any EAP (can be positive or negative) and an estimate for my annual equity build (by estimating this from an amortization table).To clarify:Annual Benefit = Annual Equity Build + / - EAP - Cost of CashNote:  This is not accurate / scientific / mathematically rigorous, and I'm not recommending it as a way to calculate returns.  

@Tony Nguyen Value add deals are still out there, just have to dig a little deeper.

You don't know what you don't now (we certainly don't know what you already know) so you're not really going to be able to ask the detailed questions until you've got some basic information and you want to dig a little deeper.

Dig a little deeper into her rental and financial history and I'll bet something shows up.I'm not saying that a review of their application and maybe even a deeper inquiry into their rental/credit/criminal history will definitely reveal something that should have been caught. 

You'll find answers to all your RE questions on here, you just have to dig a bit.  

I'm going to take out my chainsaw or dig a hole with my backhoe or something else manly.

If something seems amiss I will continue to dig, as the process does not take long. 

The best way to explaining this is for you to download an IRR calculator spreadsheet or build your own simple one and play around with one.For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

The best way to explaining this is for you to download an IRR calculator spreadsheet or build your own simple one and play around with one.For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

While I'm primarily curious about this for Austin, Texas and this "strategy" will undoubtedly vary city by city, and most likely only be considered for more suburban properties, allow me to wonder:
Have you successfu...